Australian electricity bills to surge as Energy Regulator and Essential Services Commission deliver drafts
Energy bills are set to soar, bringing to bear more financial pressure on already cash-strapped Aussies.
On Thursday, the Australian Energy Regulator (AER), which sets prices for South Australia, New South Wales and south-east Queensland, delivered its draft determination for the Default Marker Offer (DMO) for energy prices in 2025-2026, which is known as DMO7.
The regulator blamed “cost increases across nearly all components” for the price hike in DMO7, warning residential customers to expect increases between 2.5 per cent and 8.9 per cent, depending on their region.
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By continuing you agree to our Terms and Privacy Policy.It added small business customers could see rises between 4.2 per cent and 8.2 per cent.
“We know that cost-of-living pressures are front of mind for many households and small businesses.
“We’ve seen cost pressures across nearly every component of the DMO, and we have given careful scrutiny to every element of the DMO cost stack to ensure prices are a reasonable reflection of the costs of a retailer to supply electricity,” AER Chair Clare Savage said.
She blamed “multiple and varying factors” for the price hike.
“While economic conditions have eased somewhat, underlying inflation remains elevated and the Reserve Bank of Australia has noted the economic outlook remains uncertain,” Ms Savage said.
“The draft DMO prices, therefore, do not include a competition allowance.
“Not including the competition allowance will also alleviate a small amount of cost-of-living pressure on consumers.”
Ms Savage said it was vital that consumers shopped around for competitive offers.
“The DMO is intended as a safety net for those who don’t or can’t shop around, but there are better offers available.
“It’s important that consumers regularly shop around to compare available deals and ensure they’re on the best plan for their individual circumstances.
The AER does not rule on energy retailing in Western Australia.
In Victoria, the Essential Services Commissioner (ESC) handed down its draft, recommending the Victoria default offer (VDO) be increased.
The change recommended changes to pricing by zones, meaning some areas could see electricity bills fall by $19 annually, based on the yearly average use, while others could see an increase of $68.
